One Hamas master bomber was alleged to have been given £100,000 of the cash, by the Palestinian Liberation Organisation

Dfid has previously admitted the PLO makes “social welfare” provisions for prisoners’ families but ruled out the idea UK cash is being diverted in this way.

Government sources yesterday conceded that many of the civil servants were doing other jobs while pocketing UK taxpayers’ cash.

The decision by the Department for International Development means £25 million in cash is being withheld this year – a third of the total aid sent to Palestine. The majority goes to charities in the region.

A total of £25 million in aid cash is being withheld from Palestine.

Whitehall insiders insisted the payments to the Palestinian Authority should re-start next year once the investigation is complete.

A source said: “We are not stopping for the Palestinian Authority overall, just delaying it to a date when we know our money won’t be going to people who do nothing in return for it.”

The move by Ms Patel is the latest in a whirlwind of action since the Brexit champion took over at a Department she has savaged in the past.

She has called for the £12 billion aid programme to be radically reshaped so taxpayers’ cash can be used to tackle immigration and create jobs in poor countries

Much of the cash sent overseas has gone on traditional charity schemes such as water projects, battling poverty and childcare for some of the most vulnerable people in the world.

But the Department has suffered from a string of high profile gaffes, such as spending money on an Indian space programme and seeing funds used to find mates for a rare species of tropical fish.